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The Currency Trade Greece's Turmoil Is Hiding

Laura Ciapponi | Stockbyte | Getty Images

If you think the euro zone turmoil is the only currency game in town, you'll miss a nice trading opportunity further north.

Sure, it's fun to watch the euro bounce around like a ping pong ball. But don't let it hypnotize you: the Bank of England is meeting on Thursday, and that's creating a trading opportunity, says Andrew Busch, global currency and public policy strategist for BMO Capital.

With the British economy slowing, Busch sees three possible outcomes from the meeting. The bank could essentially do nothing, undertake minor quantitative easing on the order of 25 billion pounds, or do more.

"If they do another big tranche like they did last time, 75 billion sterling worth of new QE, that's when we want to step in and sell sterling and we want to buy Swiss francs," Busch told CNBC's Melissa Lee.

The pound would almost certainly weaken on news of significant quantitative easing, and Busch thinks the Swissie has upside potential. Swiss officials are talking about more currency-market intervention to weaken the Swiss franc, which itself is pushing the currency lower - but Busch doesn't expect any intervention to have a lasting effect.

He wants to sell the pound against the Swiss franc at 1.4295 with a stop at 1.4475 and a target of 1.3725. (You can adjust these levels to reflect the current market when you make the trade.)

Rebecca Patterson, chief markets strategist for J.P. Morgan Asset Management, Institutional, says the trade is "interesting." She points out that if the situation in Europe deteriorates this week, that is also likely to put pressure on the British pound and give the safe-haven Swiss franc a lift.

You can watch the whole discussion on this videotape.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.

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